There is no denying that blockchain is the wave of the future but, for some, it is currently too nebulous and intangible to consider investing heavily.
Following the cryptocurrency crash earlier this year, the cryptocurrency market has seen colossal corrections and some sizeable rallies. Understandably, that uncertainty continues, but the blockchain VC fund mocha companies believes these corrections are healthy for the industry as a whole and provide tremendous opportunities for savvy investors to enter the digital asset market at the right time with the right partner.
The team behind Mocha Ventures is on a mission to ensure that “Blockchain networks and digital assets are landmark innovations that will fundamentally reshape the global financial system, and investors should be able to participate in this transformation.”
By working with early-stage blockchain projects and offering professional data-driven solutions for digital asset investors, they introduce a new way of understanding and investing in the space.
Before partnering with Campden Wealth a The 24th European Family Office Forum in London on November 1 and 2, mocha companiesGeneral partners discuss how they are capturing some of the most innovative technology in the blockchain revolution and why family offices should get involved…
You focus on early stage blockchain companies with global growth potential. How do you identify these companies and what is the criteria they must meet?
Renato Brioni: As venture capitalists, we transitioned in 2020 from standard investing to blockchain because we saw the remarkable opportunities after one of our funds had huge multiple returns on exit. We felt that something was going on there.
We decided not to get involved with bitcoins and cryptocurrencies because they are completely unpredictable. So we thought, why aren’t we different? During the cryptocurrency crash of the summer of 2022, we analyzed over 200 cryptocurrency companies and uncovered patterns that revealed to us what separates the winners from the losers. Of those companies, 100 simply disappeared, 60 survived and 40 prospered.
So we did an in-depth analysis asking what it was about those 40 companies that made them so successful. As a result, we defined seven different pillars of success that we now use in our due diligence: Founder, Team, Go to Market, Technology, Utility, Innovation, and Community. This scorecard allows us to rank the seven things that successful companies have really gotten right and helps us define the potential return on our investment. We like proper due diligence, we like things to be put in order.
What advice would you give to family offices looking to get into blockchain venture capital but don’t know where to start?
Little Joseph:One of the hardest things family offices face when they first hear about blockchain is understanding what it means. Really, what is the difference between blockchain and my son’s World Of Warcraft account?
Our primary goal is, as a background, to make money, but our secondary goal is to grow this community. Just as we have seen the Internet evolve and become a part of all of our lives, we see the same thing happening with blockchain and how it will integrate with our technology.
So to help people, as well as to help further monetization, we really believe in bringing tangible assets into the digital asset class, like using NFTs to help facilitate real estate transactions. We believe that assets that a consumer, business or investor can see and use are vital to the adoption of cryptocurrencies and the blockchain, not just vital, but inevitable.
Renato Brioni: If you look at family offices investing directly in digital assets, typically led by the younger generation, our data shows that the allocation is currently around 2% of total family office assets. The problem is that if you look globally, there are currently not many regulations around the world apart from Europe and Dubai at the moment. So when we talked to family offices and tier one VCs from Australia, Singapore and Dubai, they said what they lack is three things: ‘We need a crypto fund that is regulated. We want to sleep at night knowing that the people we work with will not disappear overnight. And we want people to guide us through uncharted waters of digital assets.”
So when we help family offices, we sit down with them and explain that this can be a risky business if you don’t know what you’re doing. They need to work with someone they can trust, who is regulated, and who has a previous track record of success.
At the end of the day, we invest in blockchain and crypto projects that are; solve real business problems, have existing users and paying customers, you can survive and thrive in the bear market and explode in the bull market.
In Campden Wealth’s 2021 North American Family Office Report, we find that digital asset adoption is on the rise, with 31% of North American Family Offices already investing in cryptocurrency. However, there are still doubts to invest digitally, why?
Renato Brioni: There is perception and there is reality. The perception is that there are a lot of people who won’t invest in this field because they find it risky and don’t understand it. If you don’t understand it, don’t touch it.
Family office trustees can find it difficult to trust the younger members of the family, the generation that more easily understands the benefits of digital assets.
When someone teaches you to drive a car, they also have control of the pedals. We let you drive, but we can also take control and guide you. Once you’ve seen some returns and see that those returns are realistic, people start to change their minds.
Little Joseph:The reality is that it will take time to change hearts and minds, but people are realizing it. When web 1.0 came along in the 1990s and early 2000s, no one was going to sign a document and email it. But then towards the end of web 2.0, DocuSign came along and we realized that this is a non-expendable asset, a real use case for the technology. The technology has now adapted or evolved – we now use DocuSign every day, it’s even admissible in court. Blockchain is just the next iteration, it is a continuation of the internet that we know and use. Where we were able to secure documents, we can now secure the privacy of an individual and those individuals now also have power and control over that information.
Mocha Ventures are the main partners at Campden Wealth’s 24th European Family Office Forum in London on November 1-2. For more information and registration, Click here.